Snap upgraded, Roku downgraded: Wall Street’s top analyst calls

The most talked about and market moving research calls around Wall Street are now in one place. Here are today’s research calls that investors need to know, as compiled by The Fly. 

Top 5 Upgrades:

• Guggenheim upgraded Snap (SNAP) to Buy from Neutral with a price target of $23, up from $9. Guggenheim expects overall digital advertising demand will accelerate in 2024, and that Snap’s revenue growth will outperform as demand drives industry-wide ad price increases and improved relative return for Snap’s ad units.
• Wolfe Research upgraded Salesforce (CRM) to Outperform from Peer Perform with a $315 price target. The firm, whose core thesis is that growth has bottomed and should stay double digits and that the “commitment to margin leverage is real,” thinks 2024 is “the year to own this value growth stock.”
• Daiwa upgraded JPMorgan (JPM) to Buy from Outperform with a $200 price target. The firm lifted its sector rating for the U.S. major banks to Positive as it now assumes a soft landing for the U.S. economy and thinks the Basel III Endgame NPR that “drew fierce opposition” may be partially scaled back. JPMorgan also upgraded Citi (C) to Buy from Neutral.
• Wells Fargo upgraded Progressive (PGR) to Overweight from Equal Weight with a price target of $176, up from $144. The firm believes Progressive should return to PIF growth in 2024.
• Goldman Sachs upgraded Sunnova Energy (NOVA) to Buy from Neutral with a $17 price target. The firm sees a growth inflection in 2024 in the residential solar market, with the better mix to leverage nearer-term upside, as well as a potentially stabilizing lending environment.

Top 5 Downgrades:

• Seaport Research downgraded Roku (ROKU) to Sell from Neutral with a $75 price target. Roku’s advertising growth faces challenges from “streaming behemoths” Disney+ (DIS) and Netflix (NFLX) having launched ad tiers, as well as the broader Media & Entertainment spending pullback and from a softer upfront and scatter market that reacted to last season’s trends, the firm tells investors.
• Raymond James downgraded Palo Alto Networks (PANW) to Market Perform from Outperform. Since May 2021, a period when Palo Alto Networks had underperformed peers, but the firm’s work suggested an upcoming period of broader platform sales with larger deal sizes that the firm thought would ultimately lead to a period of healthy growth and incremental profitability, the firm tells investors in a research note.
• HSBC downgraded AbbVie (ABBV) to Hold from Buy with a price target of $156, down from $167. The firm cites questions about its capital discipline. HSBC also downgraded UnitedHealth (UNH) to Reduce from Hold with a price target of $480, down from $550, as regulatory risk has increased and is posing a headwind to margins.
• Deutsche Bank downgraded Arm (ARM) to Hold from Buy with a price target of $70, up from $60. While confident in improving fundamental growth in 2024 for the Semis group, the firm notes the rapid rise in the SOX over the last one and a half months has created a more challenging stock “setup” heading into 2024, with some names like Arm now appearing fully valued.
• Wells Fargo downgraded Chubb (CB) to Equal Weight from Overweight with a price target of $240, down from $253. Heading into 2024, the firm is taking a more cautious view on the commercial lines sector and as a result, moving to the sidelines on Chubb.

Top 5 Initiations:

• New Street initiated coverage of Lam Research (LRCX) with a Neutral rating and $790 price target. In its Semicap sector initiation, the firm said it sees “excellent” fundamentals” and likes the long-term outlook, but adds that it sees two years of muted growth ahead.
• HSBC initiated coverage of Trade Desk (TTD) with a Buy rating and $83.20 price target. Trade Desk’s position as the leading and largest independent Demand Side Platform with a track record for innovation should support continued outperformance in the fast-growing programmatic space, the firm tells investors in a research note.
• HSBC initiated coverage of Unity (U) with a Hold rating and $37 price target. While Unity’s AdTech business is turning the corner and the revamp of game engine fees should prove revenue accretive, the company is still looking at deaccelerating organic growth and a sizable convertible debt overhang with little prospect of near-term profitability, the firm tells investors in a research note.
• William Blair initiated coverage of QuantumScape (QS) with a Market Perform rating.. QuantumScape is developing a unique “anode-free” battery and has delivered A-samples to auto OEM partners, but full commercialization is “a 2027 and beyond story,” the firm tells investors.
• HSBC initiated coverage of AppLovin (APP) with a Buy rating and $53.20 price target. As the market leader in mobile app install advertising with a lead in AI solutions, AppLovin is well-positioned to benefit from the budding recovery of the segment, the firm argues.